The Fed is ready to start tapering in November. Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
USD surged after Fed’s hawkish surprise
- The Fed made a hawkish surprise! The bank would start a discussion about scaling back bond purchases. Besides, it is likely to make two interest-rate increases by the end of 2023 (sooner than expected)! Finally, the central bank raised estimates for inflation for the next three years and upgraded the GDP growth to 7% for this year from the prior 6.5%. As a result, the US dollar surged to levels unseen since early May, while stocks, stock indices, crude oil, and gold sharply dropped.
- Australian labor data came out better than expected. The number of employed Australians rose to 115,000, while only 30,000 were forecasted. The jobless rate was 5.1%, better than the anticipated 5.5%. AUD/USD is likely to rise today due to the positive labor data.
- Turkey’s central bank is expected to keep interest rates unchanged. The Turkish lira is traded at the local lows. USD/TRY has just crossed 8.60, and it’s edging higher to 8.70.
EUR/USD dropped enormously! The pair has just broken below the psychological mark of 1.2000 and the 200-day moving average. Now it is getting closer to the lower trend line at 1.1950, which the pair may struggle to break. The RSI indicator is below 30,00 on the 4-hour chart, signaling the pair is oversold. Thus, we might expect the reverse up soon. The move above 1.2000 will drive EUR/USD back to 1.2050.
It’s quite an interesting situation on the gold chart! XAU/USD has broken the 61.8% Fibonacci retracement level and pulled back to it. The long upper shadow tells us that the price is going to reverse down. The move below the 50.0% Fibo level of $1800 will push the metal to the next level at $1770.
S&P 500 has reversed down and touched the lower trend line at 4175. It’s a perfect opportunity to buy such a credible stock index at a lower price! The move above Tuesday’s high of 4260 will drive the stock index to the psychological mark of 4300. Support levels are at the 50-day moving average of 4175 and the mid-May lows of 4115.
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
The crypto market keeps recovering. Bitcoin has broken above $57,000. The way up to $60,000 is open now!
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).
Great Britain will publish the Inflation Rate on October 20, at 09:00 MT time (GMT+3).
The bullish movement in the stock market is gaining speed, and Bitcoin ETFs are closer than they might seem. What do we need to know for the next trading week?